Pakistan received US$2 billion in financial aid from Saudi Arabia before the International Monetary Fund (IMF) made a final decision on a bailout plan for the US dollar-strapped South Asian country.
Ishaq Dar, Pakistan's finance minister, tweeted on July 11 that the
State Bank of Pakistan (SBP) had received a $2 billion deposit from the Kingdom
of Saudi Arabia.
"This inflow increases the
foreign exchange reserves held by SBP and will therefore be reflected in the
foreign exchange reserves for the week ending July 14," he added.
The benchmark Pakistan Stock
Exchange (PSX) index KSE-100 rose 1.28% on July 11 amid reports of capital
injections from Saudi Arabia.
The IMF board of directors is
expected to approve Pakistan's $3 billion nine-month standby arrangement on
Wednesday.
Pakistan, a net importer of
crude oil and petrochemicals, was on the brink of bankruptcy when it received
IMF staff approval for a bailout on June 30, just before the Enhanced Financing
Facility (EFF) with multinationals expired.
The approval of the IMF Board
will result in an immediate disbursement of $1.2 billion. The remaining $1.8
billion is expected to be paid in November 2023 and February 2024, after
review.
At a conference in Switzerland
in January this year, representatives of some 40 countries, as well as
individual donors and international financial institutions, appealed for funds to
help Pakistan meet nearly half the cost of rebuilding after a year of
devastating floods that hit the country.
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